Spain

Spain

SGRE suspends 2020 guidance

Siemens Gamesa Renewable Energy (SGRE) has withdrawn its financial guidance for the 2020 financial year due to uncertainty associated with the Covid-19 pandemic.

SGRE said the impacts from the coronavirus were most keenly felt in India and northern Europe
SGRE said the impacts from the coronavirus were most keenly felt in India and northern Europe

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It had expected revenue of €10.2-10.6 billion and an Ebit margin of 4.5-6% for 2020.

In a stock exchange filing, the manufacturer explained that the pandemic had disrupted its supply chain, manufacturing operations, project execution, and commercial activity, with most of the impact felt in its onshore business unit.

It follows fellow turbine manufacturer Vestas, which suspended its 2020 guidance earlier this month.

SGRE warned there might be further disruptions to its offshore and service businesses in the coming months, but it expected these to be “significantly lower”.

SGRE “cannot forecast or quantify with reasonable accuracy the full duration and financial magnitude of the (virus’) impact” and so had decided to withdraw its financial guidance.

To date, the coronavirus pandemic has mostly impacted SGRE’s operations in India and northern Europe.

In January, the OEM reported challenges in northern Europe, where it claimed the early arrival of winter weather prevented it from carrying out installations at five wind farms, prompting it to lower its forecast Ebit margin from 5.5-7% to 4.5-6%.

And in its Q1 results, released in February, the manufacturer warned of “market volatility” in India.

These challenges have been compounded by disruptions caused by the coronavirus, it stated.

SGRE gained experience during the SARS epidemic in 2003 allowing it to “introduce early prevention measures, ahead of government reaction in every country” for the current health crisis.

The manufacturer extended working from home wherever possible, banned all travel to at-risk areas, restricted non-essential traveling, and “implemented specific protocols” for working in factories, service warehouses, wind farms, and vessels to detect the virus early in a bid to minimise its spread.

It had extended Chinese New Year (25 January) holidays at its blades and nacelle factories in Lingang and Tianjin respectively, but regular production levels at these plants resumed at the end of March.

SGRE has also reopened its technology centre and blades factory in Spain following a national pause on non-essential work.

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